The company I work for has a negative vendor balance for three vendors from 2014 and older. It looks like a bill payment was made for multiple bills, the check was sent out, and then the bill amount(s) were reduced after the checks had cleared. My question is this: how can I adjust the vendor balance so that it's back to $0 without having an unpaid bill entered? We can't make any changes to the reporting period in question because of tax purposes. We also want to do this on our end without collecting a reimbursement or anything like that.
Thanks for replying. I followed your advice and entered those transactions, but I don't want for there to be a bill (or in this case, a journal entry) present when I go to the vendors > pay bills option. Is there any way to both get rid of the bill and the negative balance?
I can point you in the right direction getting rid of the bill and negative balance.
When clearing out vendor balances in QuickBooks Desktop, you can either create a journal entry or enter a bill. Since you don’t want these transactions to be present when paying bills, I recommend consulting with your accountant.
Every business is different and so having someone who can look at your books and see what your needs are will allow for the process that is best for your business to be followed.
I want to ensure you'll see the latest news and features about the product, so I'm adding a link to The QuickBooks Blog.
That's it. Feel free to leave me a comment if you questions about QuickBooks. I'll be around to answer them. Enjoy the rest of your day.
I just encountered a negative vendor balance on a new vendor when I tried to make a partial payment--pay an amount less than the outstanding balance without using discounts....another story.
The way I got rid of my negative vendor balance, which also drove me crazy when I went into pay vendor and saw this debit and could not pay the vendor:
1. The journal entry method will not work because the credit to accounts payable will require a debit, most likely to expense, so your P&L is wrong.
2. So I went into Vendors-->selected my problem vendor-->made sure I was on TRANSACTIONS about 3 inches down from the top-->clicked on SHOW balance details-->found that my first invoice from that vendor was somehow throwing off an "Open Balance" of the crazy debit-->click on said first invoice and deleted it (from the Vendor Information window).
3. Went into Enter Bills and put that vendor back in for the date and invoice amount.
4. Went into the partial payment made on this vendor and applied it to the invoice in 3. I did this by going into "Chart of Accounts", finding the check written on the right date to the right vendor in the Operating Cash line, clicked on the left where is says "BILLPMT", up comes your cleared check, on the far right type the amount of the check in "AMT. PAID", click "Save and Close".
If you go into "Pay Bills", your negative vendor balance should be gone. AGAIN, it is very important to figure out the vendor invoice which is throwing off the weird "Opening Balance" which should be zero! That is your bad actor which must be eliminated. Again see 2. above.
Good luck and this snarly one took me way too long, Mary CPA at [email address removed]